Large Caps Set to Lead the Next Market Cycle: Raamdeo Agrawal’s Big Call
India’s equity market may be preparing for a leadership shift. According to Raamdeo Agrawal, Chairman of Motilal Oswal Financial Services, the next 4–5 years could mark a strong phase for large‑cap stocks, after a period dominated by midcaps.
“The past five years belonged to midcaps; the next five years will be of large caps.”
With markets showing signs of rotation and valuations normalizing in broader segments, Agrawal believes large caps are now poised to outperform as the tide turns.
Market Outlook: 12%–14% Equity Returns Expected
Agrawal expects the equity markets to deliver 12–14% annual returns over the coming years — even with some stocks trading at elevated valuations.
“Even expensive stocks can still generate around 12% returns,” he said, emphasizing that long-term compounding remains intact for quality businesses.
Big Themes Driving the Next Wealth Cycle
Agrawal highlighted two major themes likely to create outsized wealth:
Auto Sector: India at a Major Consumption Tipping Point
India’s automobile industry is entering a transformative phase — similar to China’s explosive car adoption post‑2008.
“The economy moved from bicycles to motorcycles around 1990. Now the tipping point is from motorcycles to cars.”
The recent GST reduction from 28% to 18% will significantly boost demand, he added.
Top Auto Bets
Eicher Motors
Hero MotoCorp
M&M
Maruti Suzuki
Capital Markets & Financials: Riding India’s Financialization Boom
As household savings shift toward equities, digital platforms, and wealth products, capital‑market businesses are expected to flourish.
Top Capital Market Picks
360 One
HDFC AMC
BSE
Nuvama Wealth
MCX
Banking & Finance Picks
HDFC Bank
ICICI Bank
SBI
AU Small Finance Bank
India’s Fastest Wealth Creators (2020–2025)
Motilal Oswal’s Wealth Creation Study reveals the top performers with the highest compounded annual returns:
BSE — 124% CAGR
Adani Enterprises
Hindustan Aeronautics
Bharat Electronics
Persistent Systems
Rail Vikas Nigam
Indian Bank
Varun Beverages
Trent
Jindal Steel
A critical insight:
Seven of the top ten consistent wealth creators were trading at single‑digit PE ratios in March 2020.
This reinforces the principle that deep corrections unlock generational buying opportunities.
Why Market Giants Underperformed
Large conglomerates like Reliance Industries, HDFC Bank, TCS and Infosys have not featured among top wealth creators.
Agrawal attributes this to:
High base effect
Difficulty in outpacing index returns at mega‑cap scale
“Market cap giants are likely to struggle to outperform the market.”
INDIGO: A Fresh Buy Opportunity?
Agrawal sees value emerging in InterGlobe Aviation (Indigo) after the stock corrected due to widespread flight cancellations.
He believes the dip offers an attractive accumulation opportunity for long-term investors.
Sectoral Leaders to Watch
BSE, Rail Vikas, Jindal Steel, CE Vernova T&D, Persistent Systems, FACT, Dixon Technologies, Adani Power, Adani Enterprises, Hitachi Energy
— all continue to demonstrate strong structural momentum.
Explore More Insights
To deepen your understanding of how technical trends, market structure, and sector rotation influence long‑term wealth creation:
Explore guidance from Ranjit Jha (CEO, Rurash Financials) — a pioneer in research‑driven wealth advisory.
Learn how Rurash Financials empowers investors through:
• AIF access
• Portfolio engineering
• Unlisted equity opportunities
• Personalised wealth strategies
Visit the official Rurash Financials website to know more.